Here in B.C., we’re richer than we think — on paper

VANCOUVER — Are all those folks struggling mightily to afford a Lower Mainland lifestyle really richer than they think? Statistics Canada believes so.

Widely reported new numbers show B.C. residents have the highest net worth in the country. No big surprise. That’s mainly because of real estate holdings that have surged in value over time.

Subtracting debts from assets, B.C. families had an average net worth of $691,300 in 2012 — compared with a Canada-wide average of $554,100.

British Columbians are Canada’s oil sheiks, only instead of petroleum assets we own overpriced homes.

In 2012, family units in the province — both individuals and families of two or more — held 17 per cent of Canada’s net worth despite having just 13.6 per cent of its families.

Statistics Canada’s recently released Survey of Financial Security affords those interested a delicious peek inside the normally locked vault of family finances.

And so, we learn some 53 per cent of British Columbians’ family assets are attributable to a principal residence and other real estate holdings.

Canada wide, the comparable share is lower, at 44.5 per cent.

Alas, mortgages on those real estate assets account for more than 80 per cent of B.C. families’ indebtedness, 77 per cent for families across Canada.

In B.C., 61.6 per cent of families owned their homes, and 18.4 per cent also held other real estate. But 35 per cent of them held mortgages on their main property; 32 per cent also held mortgages on their other real estate.

Figures for Canada are quite similar on this front. But differences become more apparent with scrutiny of the size of families’ mortgage indebtedness.

The average mortgage on a principal residence held by B.C. families holding mortgages was $242,000 as of two years ago.

Keep in mind, that figure represents the average size of mortgages across the province. Just imagine how onerous the mortgages in the city of Vancouver would be, if singled out? Unfortunately, data is provided only by province and nationally, not by city.

Among all Canadian families with mortgages, the liability averaged quite a bit less — $166,700.

As has been reported, people in this province are the most indebted in the country, but their debts to date have been manageable with foreclosure rates and bankruptcies modest by national standards.

And it’s reassuring to know, even after high housing costs, B.C. families are socking away other assets.

For example, they hold an average of $145,600 in stocks, while families elsewhere have an average $164,800 in stocks.

For all the talk of well-off British Columbians, the truth is most of us feel like churchmice after deducting housing costs from the family budget.

And it is important to remember all the British Columbians out there without real estate holdings and those, especially in Vancouver, with little hope of acquiring any, given the sky-high prices. Even teardowns and fixer-uppers have grown out of reach.

My veterinarian, owner of a successful west-side practice, emailed recently to say young professionals like him “are left with a choice between living in a 300-square-foot closet, moving to northern B.C. or renting for life.”

And among those who can claim ownership, more than a third have mortgages to pay off.

Remember, too, B.C.’s median household income lags behind many other provinces. Stagnant job growth and weekly wages also are hampering people’s view of themselves as well off.

British Columbians, the richest folks in Canada? Only some of them. And only on paper.

The Vancouver Sun